The price of gasoline at our local gas station has gone down by 11 cents a liter in the last couple of days. This coincides with this article about concerns for the future of the Alberta oil sands project.

Oil from the Alberta tar sands is expensive to extract and illustrates the workings of marginal cost. As everyone knows price is equal to marginal cost, the cost of producing the last unit.

As demand for oil has increased the price has gone up making it economic to go after more difficult deposits such as the tar sands. This may keep up production but I fear that rather than allowing economic growth to continue it just slows down the rate of negative growth. Economic growth would be more likely if marginal cost were falling with increasing production.

It also means a reallocation of financial resources to maintain our energy use which must be causing problems throughout the rest of the economy. The more we spend on oil the less we have for other products.

We should not assume that the cost of exploiting the oil sands is consistent through the whole deposit. It could be the marginal cost will keep increasing as the easiest of the deposits is depleted.

A further problem for oil sands producers is that if the price of oil falls as a result of an economic slowdown, then they may not get enough to cover their costs and will have to stop production.

Probably most of us Canadians benefit from the oil sands but we shouldn’t be too complacent.

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Cover Notes

After my first family broke up I went to the University of British Columbia and did a degree in economics because I was intrigued by the way in which money is created and because I wanted to understand the dynamics of how we exchange goods and services.

I concluded economics is mostly about relationships and we should evaluate economic policies by how they contribute to good relationships.

We have two major economic problems with which we should be dealing. The first is that while we have lots of energy and mineral resources left on this planet, we have used up the most easily accessible. Those that are left require an excessive amount of energy to extract. The second major problem is that our so-called "market" economy is largely based on legislation which restricts competition and thus allows some people an unequal share of the agricultural surplus.

To deal with these problems we need to focus our economy on a policy of sharing in the same way that families and people in small-scale societies share their food. We also need a universal guaranteed income scheme AND a new way of creating money. This would be a tremendous transfer of decision-making power from governments and bankers to individuals.

In this book you will learn:

why the economic principles of marginal cost and the elasticity of the demand curve say it should be priced at 99 cents.

why relationships are an important part of economics.

what it takes to make a good relationship.

that our civilization is based upon a huge agricultural surplus which should be considered an inheritance to be shared equally by everyone.

how the financial and the physical aspects of the economy interact.

how money is created out of thin air and the problems this creates for our well being.

how we can finance a guaranteed annual income scheme.

how to become a part of the ten percent,

how not to become a slave.

The list of ebook stores from which you may download this book is at the top of the home page.

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